Real Estate

In 'shadow market' take care choosing agent

Real-estate specialists call it "the shadow market." By this they mean the tens of thousands of potential home sellers who've long waited for a robust economy to return before putting their property up for sale.

Now many potential sellers feel they've waited long enough. With or without a perfect economy, they've decided to sell now to move on with their lives, says Ronald Phipps, the principal broker of a family-owned realty firm and president-elect of the National Association of Realtors (www.realtor.org).

Although many home sales are prompted by circumstances beyond the owners' control, such as unemployment or divorce, those emerging from the shadow market also include people who've decided to sell voluntarily, says Leo Berard, a real-estate broker and charter president of the National Association of Exclusive Buyer Agents (www.naeba.org).

"But to move forward, these people have to sell their present place first," he says.

Whether your home sale is voluntary or involuntary, Berard says it's critical that you take special care when selecting a listing agent.

Before the economic downturn, more would-be sellers took a casual approach to the agent-selection process, often making a hasty decision, according to Phipps. But that's changing.

"It used to be that a lot of people would just call in a family member or friend who happened to have a real-estate license. The good news is that sellers are now searching more widely," he says.

Here are pointers for homeowners determined to find a skillful listing agent:

* Get an agent who knows your locale well.

Your cousin might be an excellent real-estate agent. But should you consider hiring this person if his office is located a significant distance away from where you live?

Absolutely not, says Berard, who contends that a faraway agent is likely to be much less effective in marketing your property than one who knows your local turf well.

"An agent based more than 12 to 15 miles away from your house can't be as responsive to buyers and their agents as someone close by," he says.

It's especially wise to have an agent close by if you're trying to sell a condo in an urban setting. In such a case, the ideal agent is often someone with proven experience selling units in your same building.

"Agents who are close are much better at offering you advice on pricing and will be more knowledgeable about your community when calls come in," Berard says.

Realtors call the area where they most often sell homes their "farm." And agents who say they farm your area should be able to show this with a list of transactions they've done there recently, Berard says.

* Interview at least two to three listing prospects.

Without interviewing other contenders, you may be tempted to hire an agent who comes highly recommended. But Phipps says "when you talk to several people, you'll get different perspectives on your sale," and several opinions on pricing can be especially helpful.

He says be wary of any agent who suggests listing your place for more than 10 percent above what others say is its fair market value.

"Find out how they arrived at that higher price," says Phipps, noting that occasionally some agents may suggest an above-market list price as a way to flatter you into hiring them. This practice is known as "buying the listing."

* Ask the agents you interview about their awards and honors.

Phipps says one way to determine agents' expertise is to ask if they've been elected to positions of leadership within their professional groups, which "shows they have a reputation for collaborating with other real-estate people."

That's important, he says, because real estate is a cooperative profession and a successful sale typically involves more than one agent.

* Choose a seasoned listing agent with a proven deal-closing record.

During boom times, most sellers feel home free once they've obtained a ratified contract, meaning their deal has been agreed upon by both sides of the transaction.

But in the current period, Phipps says, many sellers are understandably nervous that complications might arise with a buyer's financing. Also, more bank appraisals are coming in below the offered price.

"So it's smart to find an agent with experience handling many different kinds of transactions."